AmerCon : Energy : OPEC

Energy / OPEC

Oil production is either reaching a plateau or declining in 33 of the 48 major oil-

producing

countries, including 6 of the 11 OPEC countries. Within a few years

(probably by 2008),

production and price will be controlled by OPEC.

Resources

OPEC / Organization of Petroleum Export Companies

elected Reading

2004.12.11 O

PEC votes to reduce

output

Washington Post / Justin Blum

America/Canada's reporting of 200 billion barrels of reserve here is a bit disingenuous.
Harvesting and turning tar sand and oil shale into gasoline, technologically, is almost
completely unrelated to the simple refining process that turns sweet saudi crude into dozens of
blended and exotic fuels. Only 25 billion barrels of this reserve is remotely like the oil in the
middle-east. Canada is successfully harvesting one million barrels a day of this glop, but it is
also making lakes of the foulest black gunk in doing so. To harvest 20 million barrels a day
(America's current burn rate for real oil) simply isn't conceivable until we figure out how to
manage the gunk.

Secondly, it takes a lot of energy to separate oil from tar sands. In Canada, this energy
currently comes from gas. But with gas declining, discussions are already underway regarding
investments in nuclear plants to process tar sand.

Our challenge is how large the numbers are. The world needs a billion barrels every twelve
days. Imagine replacing 30 billion barrels of year of anything -- and doing it year after year.

Nor are we very certain that the middle-east has the oil reserves they report (see here).

The point to be made here is that an institutional cartel will soon control the availability and the
price of the most valued commodity in the world.

And because oil is a non-renewable treasure, there is every economic reason for the OPEC
nations to sell dearly. They also know they will run out and they have every reason to
maximize their realizable profits.

We may discover that a "fair" price for oil is what our "corporatist religion" of free
market capitalism has always said it is -- whatever the market will bear.

A wise nation would plan for that.

ehj2